American Health Care Act

1 American Health care Act: (introduced in Congress March 6, 2017) Impact on OregoniansMarch 16, 2017A report from the Department of Consumer and Business Services and Oregon Health Authority to Governor Kate Brown March 16, 2017 Dear Governor Brown: Thank you for the opportunity to analyze the impact of the American Health care Act (AHCA) on Oregonians. We are pleased to present our preliminary review of this proposed federal budget reconciliation legislation, which will have a profound and largely disruptive impact on Health care for Oregonians. Oregon is a recognized national leader in Health care innovation. The Affordable care Act (ACA) has been key to providing better Health , better care and lower costs for Oregonians.

2 Under the ACA, Oregon s uninsured rate dropped from 17 percent to 5 percent. More Oregonians living in rural communities gained access to care and rural hospitals bore lower uncompensated care costs. After the ACA took effect, Oregon gained more than 23,300 Health care jobs. Still, the ACA has room for improvement. Oregon is committed to working with federal policymakers to ensure Oregon s Health system is strong and stable. Our priorities for federal reforms are: Changes to the ACA and Medicaid should maintain, not reverse, levels of Health care coverage in Oregon and other states. Oregon Health care transformation is a model for federal Medicaid reform. Medicaid cost-savings should be achieved by changing Health care delivery, not rolling back eligibility, benefits or funding levels.

3 Oregon has shown that it is possible to improve quality for patients while also reducing costs. Federal changes to the ACA should stabilize, not disrupt, Oregon s insurance market. Insurers need clarity about upcoming changes and timelines. Changes to the ACA should preserve the state s ability to serve and protect Health insurance policy holders. Maintain funding to allow innovation and focus on prevention, including core public Health services funded in the ACA and community and home-based services for long-term care . The American Health care Act fails to meet these priorities. We stand ready to continue our dialogue with Congressional leaders to advance the Health of all Oregonians. Lynne Saxton Patrick M.

4 Allen Director Director Oregon Health Authority Department of Consumer and Business Services 3 American Health care Act: Impact on Oregonians Reduce federal funding: To maintain Medicaid enrollment, we estimate the AHCA would shift $190 million in costs to Oregon starting in SFY 2020, approaching $1 billion in SFY 2023. The cumulative cost shift would be $ billion over the next six years. Reduce economic activity: The AHCA risks the loss of more than 23,300 Health care jobs that were created in Oregon after the ACA was summary Governor Kate Brown directed the Oregon Health Authority (OHA) and the Department of Consumer and Business Services (DCBS) to analyze the impact of the American Health care Act (AHCA) on Oregon.

5 OHA is the state Medicaid agency and DCBS regulates commercial insurance companies and manages the Oregon Health Insurance legislation, proposed in Congress on March 6, 2017, would change key provisions of the Affordable care Act (ACA). This report summarizes the effects the proposed AHCA would have on the lives of AHCA fundamentally changes the Health care reforms that have been implemented through the ACA and through the innovative Oregon Health Plan (OHP), the state s Medicaid program. After analyzing data to determine the impact on Oregon, OHA and DCBS find that this legislation will: Reduce coverage: As many as 465,000 Oregonians will lose Health coverage between 2018 and 2023, including approximately 80,000 next year.

6 Oregon s uninsured rate will triple from 5 percent to more than 15 percent by 2023 and continue to increase through coverage losses in OregonYearMedicaidIndividualGroupTotal20 18NA*-60,000-20,000-80,0002019NA*-70,000 -20,000-90,0002020-183,000-90,000-20,000 -293,0002026-375,000-20,000-70,000-465,0 00 Source: OHA and DCBS analysis of Congressional Budget Office report* We anticipate loss of coverage for OHP members in 2018 and 2019 will be marginal. However, it is difficult to quantify the impact of these changes at this time. OHA has greater confidence in projections of Medicaid coverage losses after 2019 when major portions of AHCA Medicaid changes and funding reductions are scheduled to Oregonians with individual insurance plans: Lowers costs for young adults and mid- to high-income earners while increasing costs for older adults and low-income enrollees.

7 Repeals the requirement for everyone to have Older adults and people with serious chronic illness: Increases premiums for older adults between 50 and 64. The bill allows insurers to set premiums for older adults five times higher than younger adults for the same coverage in the individual American Health care Act will impact the lives of Oregonians in 10 areas: 1. Low-income working Oregonians and families: Threatens the state s ability to continue serving the approximately 1 million Oregonians currently covered under the OHP as many as 375,000 members could lose coverage by 2023. It would fundamentally alter the Medicaid system in Oregon by shifting the cost burden to the state. Today, nearly 4 in 10 adults on OHP who are under 65 are Health care Act: Impact on Oregoniansmassive transfer of cost from the federal government to the states, on top of the existing state budget shortfall due to reductions in federal funding under the ACA and other factors.

8 The federal reductions proposed by the AHCA would cost Oregon $ billion in revenue by 2023. Oregon is already contending with a budget gap, resulting from the planned reduction in the federal match under the ACA. Additional cuts would force the state to pull back on coverage and Oregon s Health system: Oregon s Medicaid system currently contains costs to a growth rate of percent. This proposal disrupts decades of Oregon s innovative reforms and undermines rural Health , hospitals, and public Health . This will lead to more complexity and uncertainty for a Health system that is just beginning to stabilize from the last round of national Health reform without ensuring better care , better Health or lower costs to state taxpayers.

9 With the uninsured rate likely to triple in Oregon, hospitals will see higher rates of uncompensated care , which have fallen to historic lows since the ACA was implemented. The AHCA eliminates the Prevention and Public Health Fund, which helps local communities address unexpected Health emergencies like the Zika virus, provides immunization to children, addresses teen suicide, and helps prevent chronic diseases. 9. Oregon s insurance market: Uncertainty about who will enroll under the AHCA may further disrupt the individual market. Any disruptions are likely to lead to higher Economic impact: Following implementation of the ACA, Oregon added 23,300 Health care jobs, which are at risk under the AHCA. The loss of $ billion in federal Medicaid funding between 2020 and 2023 would slow economic activity in Oregon.

10 We expect these losses to drain more than $500 million in direct Health spending from the Oregon economy. Eliminates cost-sharing reductions. Many Oregonians with serious chronic illnesses will see higher premium costs and deductibles, putting Health insurance out of reach for the many Oregonians who have been able to get Health coverage under the Women and family planning: Restricts provider options and threatens access to family planning and preventative and wellness services for more than 51,000 Oregon women who use Planned Parenthood for cancer screenings, contraception, and STD counseling and screening. Prevents the use of federal tax credits for plans that cover abortions. Nearly all Oregon individual plans currently provide abortion coverage; there is limited time to establish stand-alone abortion coverage by Jan.